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PKF special

Reduction of the VAT rate

The corona crisis has presented Germany with unprecedented challenges and consequences for business that nobody could have predicted. The economic consequences include short-time working, loss of workforce and production, loss of customers, shorter opening hours or even company closures. With its decision of 3 June 2020, the governing coalition has decided on various measures to combat the consequences of corona. In the meantime, the federal government has presented a draft law. Readings in the German parliament are scheduled for 17/18/19 June, with the Bundesrat’s consent being expected for 26 June. The aim is, first and foremost, to strengthen the economy and economic power in Germany. The central element of these measures is the temporary reduction of the VAT rate from 19% to 16% and from 7% to 5% for the period from 1 July 2020 to 31 December 2020. This short-term reduction in VAT rates leads to a comprehensive short-term need for action for companies: Cash register and merchandise management systems, processes and financial accounting must be adapted, contracts may have to be changed.

PKF special

PKF Tax Compliance Management System

Whether it be price-fixing agreements, slush funds, unreasonable working conditions, discriminatory marketing campaigns, data and bribery scandals, or tax avoidance and tax evasion, such compliance violations in all recent cases have resulted in high costs, damage to a company’s image and personal liability for the parties involved. In this special paper on Tax Compliance Management Systems (Tax CMS) we will be discussing how, in the area of tax, you can avoid risks, enhance the quality and efficiency of processes and, ultimately, save resources. PKF’s so-called Four Phase Model plays a key role here and our presentation of this model follows after a general overview.


Information on our website is of general nature. Although we try to archive the utmost precision and topicality with great care, the information ought not to be used without professional advice on basis of a careful review of the circumstances in each individual case.

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